SAM from California posted over 2 years ago:

RoE & RoA are ok; but one needs to give more weight to Return on Capital (RoC)or Return on Invested Capital(RoIC), which allows one to judge management's ability to effectively utilize the assets put at its disposal. RoE give management the advantage of using leverage--sometime too much as in CAT (Caterpillar). The difference between the marginal Cost of Capital (CoC) & RoC is what makes the mare go. Say It Again SAM.

Mark from posted about 1 year ago:

Excellent point Roland. The article misses it and really should have addressed ROIC.

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